Mafab Communications, na Nigerian telecom company wey businessman Musbahu Muhammad Bashir dey back, dey seek to transfer key spectrum assets to MTN Nigeria. The move fit end its run as one of di kontri pioneer 5G network operators.
Di proposed transaction cover Mafab 2×20 MHz holding for di 2.1 GHz band and a 100 MHz block for di 3.5 GHz band. Di 10-year licence, wey dem issue in 2022 and wey go expire in 2032, don remain unused for four years.
MTN dey expected to pay Mafab for di spectrum, but di exact value of di transaction never dey disclosed to BusinessDay.
Dis development align with di Nigerian Communications Commission (NCC) broader crackdown on dormant spectrum. Instead of allowing valuable frequency to waste away for im remaining lifespan, di regulator dey move to reallocate unused licences to active operators wey go maximise di scarce national asset and accelerate network expansion.
If dem approve am, di transaction go mark major shift for Mafab. Di company emerge unexpectedly alongside MTN as one of Nigeria first two 5G spectrum winners in December 2021.
Both companies outbid Airtel Networks during di historic auction. Each of dem pay di $273.6 million bid price by February 2022 deadline.
After di auction, MTN pay additional $15.9 million to secure im preferred 3500–3600 MHz block. Mafab get di 3700–3800 MHz block without assignment-stage charge.
But while MTN aggressively roll out infrastructure, Mafab struggle to commercialise im network and deploy di spectrum over di subsequent four years.
For MTN Nigeria, absorbing dis idle capacity come at critical time. Di acquisition go provide di telecom giant with much-needed additional spectrum resources as rapid surge in domestic data consumption dey place increasing pressure on im existing network capacity.
Di $273.6 million figure, however, represent Mafab original spectrum acquisition cost and not di value of di proposed transaction with MTN. No transaction consideration don establish in di information wey dey available.
Mafab entry into di telecom market na one of di biggest surprises of di 2021 auction. Dem incorporate am in July 2020 and Bashir, chairman of Abuja-based Althani Group, control am. Di company had limited visibility in Nigeria telecom industry before e secure di 5G licence.
Im successful bid effectively transform Mafab into significant player in Nigeria next-generation mobile market. E give di company spectrum asset wey require substantial investment in network infrastructure, deployment and customer acquisition.
Di company later launch 5G services, although im rollout get delays in obtaining im Unified Access Service Licence and numbering plan. Di NCC subsequently grant Mafab extension to im original rollout deadline.
Di proposed spectrum transfer therefore represent sharp change from di expansion strategy wey follow im 2021 auction victory. Instead of continuing to build im own network using di spectrum, Mafab fit transfer im key holdings to operator wey already get extensive nationwide infrastructure.
For Bashir, di move go potentially bring new phase to telecom investment wey begin with one of di most expensive spectrum acquisitions in Nigeria history.
MTN already get one of di largest mobile networks and subscriber bases in Nigeria, but di proposed acquisition go strengthen im spectrum position by adding resources in two strategically important bands.
Mafab 2×20 MHz in di 2.1 GHz band fit provide additional capacity for mobile services. Di 100 MHz in di 3.5 GHz band particularly relevant to high-capacity 5G deployment.
Spectrum na finite resource, making additional holdings increasingly valuable as operators carry more traffic across dia networks. Nigeria growing dependence on mobile data, video, digital services and increasingly bandwidth-intensive applications mean say operators need to continually expand capacity rather than rely solely on additional towers.
For MTN, acquiring Mafab spectrum fit offer way to increase network capacity using additional frequencies alongside im existing infrastructure.
Di potential deal also show how Nigeria 5G market fit evolve differently from di expectations wey di 2021 auction create. Dem design di auction to introduce additional competition into di market by bringing new operator, Mafab, alongside MTN. A transfer of Mafab spectrum to MTN would instead consolidate spectrum resources in di hands of existing major operator.
Di proposed transaction never be completed transfer. Di NCC go still assess and approve di spectrum assignment or transfer, alongside di terms and structure of di proposed deal.
Di regulator decision go important because spectrum licences na national assets wey dem administer under regulatory framework designed to promote efficient use and competition. Di final structure fit also determine how dem go treat Mafab existing 5G operations and other regulatory obligations.
For di wider telecom industry, di transaction significant beyond di two companies involved. Mafab emergence from di 2021 auction get aim to broaden competition in Nigeria 5G market. A subsequent transfer of im spectrum to MTN go raise questions about how spectrum consolidation affect competition, network investment and di regulator original objectives for di 5G auction.
E go also underline di capital intensity of Nigeria telecom market, where acquiring spectrum na only di first step. Operators must subsequently fund radio equipment, fibre backhaul, power, sites and other infrastructure required to turn spectrum into commercially viable network capacity.
